Tony Zappia (Makin, Australian Labor Party, Shadow Assistant Minister for Medicare) Share this | Hansard source

Labor's going to support Appropriation Bill (No. 3) 2017-18, but we do so because we are a party that will not stand in the way of financing the government's ability to keep governing. However, it's legislation that highlights the incompetence of this government. Confidence in parliamentarians is probably lower than it has been for a long time and certainly lower than it has been in my time. It doesn't matter whether you look at this parliament—the national parliament—or state parliaments, or indeed parliaments across the seas, in other countries: there is generally a perception amongst people out there that our politicians are failing the people they represent. I pick it up in public conversations, I pick it up in political surveys, and it's noticeable in the rise and fall of minor parties.

The reality is that, even here in Australia, major parties have a declining number of committed voters. But it's also true that we see emerging new parties capitalise on that voter dissatisfaction. And it would be fair to say that some of the dissatisfaction and the public judgement made about politicians arises from the conduct of the politicians themselves. However, it's more the case that the dissatisfaction arises from the failure of governments to live up to and deliver on their election promises and the expectations that they establish in the minds of voters when they campaign to get elected. That is abundantly clear with respect to this government, particularly the current Prime Minister.

The Prime Minister came into office with considerable public goodwill. He promised the Australian people good government, and he created a perception that he was a man of principle, in touch with Australians—a man who was going to lead this country into the future. He has proven to be completely out of touch with Australians and he is a Prime Minister with no principles. The reality is that, when you set up great expectations for people and then don't live up to those expectations, the greater is the disappointment. This is a Prime Minister who has failed public expectations with respect to economic, social and environmental policy.

I want to begin with the claim that coalition members make in this place that they are better economic managers than Labor governments. It is a fallacy, and the statistics will show that time and time again. Labor kept Australia from recession during the last global economic downturn, which affected almost every other western country that we do business with. Indeed, most of the other western countries that we generally try to compare ourselves with did much worse than Australia when they were in fact probably in a better position to safeguard themselves from the downturn. That occurred because we had a Labor government in office in this country that established the right policies for the time, and those policies did exactly what they were intended to do and kept us out of recession.

We got out of recession, the coalition won government, and they simply haven't been able to manage their budget since. This year the deficit's going to be $23.6 billion. Gross debt has surpassed half a trillion dollars; I understand that it's probably closer to $600 billion. And it continues to rise. And what is the government's response to try to contain the budget deficit and the budget gross debt? It wants to provide $65 billion in business tax cuts while simultaneously cutting penalty rates, driving down wages, cutting welfare payments to some of the most needy people in Australia, and deserting environmental commitments. During a time when corporate profits are at record highs and wages growth has flatlined to perhaps the slowest since the 1960s, this government still wants to provide tax cuts to business.

This is a time when inequality is also at a 75-year high and getting worse. I want to quote from Oxfam in respect to that because Oxfam have put out a press release which says:

Over the decade since the Global Financial Crisis, the wealth of Australian billionaires has increased by almost 140 per cent to a total of $115.4 billion last year. Yet over the same time, the average wages of ordinary Australians have increased by just 36 per cent and average household wealth grew by 12 per cent.

The richest one per cent of Australians continue to own more wealth than the bottom 70 per cent of Australians combined. While everyday Australians are struggling more and more to get by, the wealthiest groups have grown richer and richer.

The argument about a trickle-down effect that coalition members continuously want to run simply doesn't work. The government claims that corporate tax cuts will result in more jobs and that more jobs will, in turn, mean a stronger economy and the like, but that simply won't arise from the policies of the trickle-down-effect tax cuts that this government wants to impose.

The second argument that the government uses is that the Australian corporate tax rates are too high. A US Congressional Budget Office report from last year that compared the corporate tax rates of the G20 countries disputes that because it shows that Australia's about in the middle of the tax rates chart. Indeed, the average tax rate paid by the American companies who invest here was about 17 per cent. The reality, however, is that the government cannot compare corporate tax rates alone if it doesn't compare all of the combined taxes of federal, state and local jurisdictions in the analysis. That's when you can get a meaningful comparison of tax payments by companies.

It's also been revealed that one in five of Australia's biggest companies have not paid any corporate tax at all in the last three years. Qantas has not paid corporate tax for nearly a decade. Its CEO, however, nearly doubled his income from $12.9 million in 2016 to $24.6 million in 2017. I want to quote what someone said about that. Linda White from the Australian Services Union said:

While Qantas workers have seen pay rises of less than 3 per cent on average over the past decade, we've seen the CEO's salary balloon to almost $100,000 a day—much more than most workers earn in a year. It doesn't trickle down—it trickles up, and the rules need to change to give workers a better deal in this country.

Qantas is not alone. Some of Australia's most prominent businesses pay no tax and have not done so for years. So how can a tax reduction increase investment, job creation or higher wages if no tax is being paid at all? There are no savings to these companies if they're not paying any tax. Therefore, there is no likelihood of additional investment, jobs being created or wages being increased.

We also know from previous disclosures that Australian companies use tax havens and low-tax jurisdictions and transfer pricing schemes to avoid their fair share of taxes. The ability of companies to minimise taxes are indeed endless in this country and, in fact, in most countries. Companies utilise whatever tax measures are available to them to reduce their tax obligations. No tax rate is low enough for tax-avoiding companies. It wouldn't even matter if it were down to 10 per cent; if they could avoid it, they would. Lowering tax rates did not produce the trickle-down effect in the UK or Canada when their tax rates dropped.

The government's largest and most reliable income source is from individuals who pay as they go taxes on their wages or pay withholding tax. The government's own documents show that, in 2016-17, $194 billion was raised from pay-as-you-go tax and withholding tax. That represented almost half of the $406 billion the government collected in taxes. Company tax amounted to $68 billion for the same period—in other words, almost a third of what pay-as-you-go tax was paid by working Australians. If you have stagnant wages, then clearly the government gets less tax. If wages increase, the government gets more tax. If you take away penalty rates, that means less wages, and that means lower taxes for the government. It is not complicated logic to understand that a wages increase represents the government's best chance of ever increasing its tax income, because wage earners pay their tax before they even see it in their pockets.

The other matter that the government would have us believe is that increased or higher tax rates paid by companies minimises the level of foreign investment in this country. Again, that is simply not true. Most of Australia's foreign investment came from countries that already have a lower tax rate than Australia's. It is not the tax rate that influences them to invest their money in Australia, it is other considerations. The statistics will show that, because, by value, 71 per cent of the money that came into this country came in from countries that have a lower tax rate than Australia's, and, by the number of countries, it was 97 per cent.

The other matter is that one-third of the government's proposed taxes, according to one report, would go to just 15 companies. The reality is that the government is mainly proposing to reduce the tax burden for 15 very large companies—in most cases, international companies—who are already doing very, very well, turning over billions of dollars, possibly making billions of dollars of profit and paying minimal tax. What the government is proposing to do is give these companies even more money in their pockets, when their years of activity in this country have shown that they are not likely to pass those profits on to employees.

I want to finish off on the matter that was debated in this House this week at length, which again highlights how this government is captive to big business. I refer to the private health insurance increases that were announced recently. We know that private health insurance has increased by 27 per cent over the last five years under this government. We also know that the CPI has been less than 10 per cent. We know that private health insurance is becoming increasingly unaffordable to most Australians. For many Australians, private health insurance costs, of around $4,500 a year, now represent about 10 per cent of their incomes. We also know that in the last three months of last year alone 12,000 people dropped out of health cover, with most of them doing so because they believed that it does not represent value for money anymore—and I suspect in some cases they simply couldn't afford it. Yet when the Labor Party announced a policy of a two per cent cap for two years, the government criticised that policy, clearly supporting, again, big business in this country—businesses that have made considerable profits, $1.8 billion in total last year, on the backs of struggling Australian families who are struggling simply to pay their private health insurance.

On every measure, whether it's climate change initiatives, university funding, school funding, TAFE funding, aged-care services, health and hospital care, science funding, environmental programs, infrastructure funding, the NBN rollout or foreign aid—and I could go on—on every single measure that one assesses this government's performance against, this is a government that has failed to meet the expectations of Australian people. It has not only failed to deliver and failed to meet those expectations; it is a government that has betrayed the trust and the confidence that the Australian people had placed in it.

See this speech in context